Tariff-Tax Reforms in Large Economies [electronic resource] Tervala, Juha.

Tervala, Juha.
Washington, D.C. : International Monetary Fund, 2012.
Government document
1 online resource (32 p.)
IMF eLibrary
IMF Working Papers; Working Paper No. 12/139.
IMF Working Papers; Working Paper No. 12/139

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Local subjects:
Applied tariff. (search)
Average tariff. (search)
Average tariff rate. (search)
Average tariff rates. (search)
Border taxes. (search)
Consumption tax. (search)
Consumption taxes. (search)
Corporate income tax. (search)
Developing countries. (search)
Distortionary effect. (search)
Domestic consumption. (search)
Domestic economy. (search)
Domestic firms. (search)
Domestic goods. (search)
Domestic ones. (search)
Domestic price. (search)
Domestic price index. (search)
Domestic prices. (search)
Domestic tax. (search)
Domestic tax reform. (search)
Dynamic effects. (search)
Economic models. (search)
Effective tax rates. (search)
Elasticity of substitution. (search)
Global welfare. (search)
Imperfect competition. (search)
Import tariff. (search)
Import tariff structure. (search)
Import tariffs. (search)
Imported goods. (search)
Income tax rates. (search)
Increased trade. (search)
Increasing consumption. (search)
Indirect tax. (search)
International trade. (search)
International trade taxes. (search)
Liberalization efforts. (search)
National policies. (search)
Nominal interest rate. (search)
Nominal interest rates. (search)
Open economies. (search)
Open economy. (search)
Optimal taxation. (search)
Perfect competition. (search)
Political economy. (search)
Process of trade liberalization. (search)
Protected goods. (search)
Reducing tariffs. (search)
Reduction in tariffs. (search)
Regional trade. (search)
Regional trade agreements. (search)
Revenue collection. (search)
Round agreement. (search)
Tariff changes. (search)
Tariff concessions. (search)
Tariff cut. (search)
Tariff cuts. (search)
Tariff liberalization. (search)
Tariff rate. (search)
Tariff rates. (search)
Tariff reduction. (search)
Tariff reductions. (search)
Tariff reform. (search)
Tariff reforms. (search)
Tariff revenue. (search)
Tariff revenues. (search)
Tariff structure. (search)
Tax collection. (search)
Tax incentives. (search)
Tax increases. (search)
Tax rate changes. (search)
Tax ratios. (search)
Tax reform. (search)
Tax reforms. (search)
Tax revenues. (search)
Tax shocks. (search)
Tax structure. (search)
Tax structures. (search)
Terms of trade. (search)
Total tax burden. (search)
Trade agreements. (search)
Trade barriers. (search)
Trade effect. (search)
Trade integration. (search)
Trade liberalization. (search)
Trade model. (search)
Trade negotiations. (search)
Trade relations. (search)
Trade restrictions. (search)
Trade taxes. (search)
Unilateral reforms. (search)
Unit of labor. (search)
Vat rate. (search)
Volume of trade. (search)
World demand. (search)
World economy. (search)
World trade. (search)
World trade organization. (search)
Sri Lanka. (search)
Uruguay. (search)
This paper studies tariff-tax reforms in a calibrated two-region global New Keynesian model composed of a developing and an advanced region. In our baseline calibration, a revenue-neutral reform that lowers tariffs in developing countries can reduce domestic welfare. The reason is that the increase in developing countries welfare due to higher output is dominated by the welfare losses stemming from the deterioration of the terms of trade. On the other hand, the reform increases output and welfare in the advanced countries and in the world as a whole. The effects that we highlight have not been studied in previous contributions to the literature, which typically looks at tariff-tax reforms using a small open economy framework. Nominal rigidities have important implications for adjustment dynamics in our model. In the case of a ""point-for-point"" reform, for example, price stickiness implies that the international dynamics of output is reversed compared to a revenue neutral reform.
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Ganelli, Giovanni.
Tervala, Juha.
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